JBS creates joint venture and receives US$2.5 billion contribution from Indonesian sovereign wealth fund

Under the agreement, the fund's investment arm, PT Danantara Investment Management (DIM), will invest US$2.5 billion (R$12.8 billion) in a joint venture - a company created and jointly controlled by two partners to develop a specific business.

The completion of the transaction still depends on obtaining regulatory approvals, the transfer of Australian and New Zealand assets to the new company and the fulfillment of other usual conditions for this type of transaction. JBS stated that there is no guarantee that the partnership will be concluded nor when this may occur.

The new company to be created will bring together all JBS businesses in Australia and New Zealand. In exchange for the initial investment, DIM will hold 25% of the shares in the joint venture.

The contribution will be made in stages: US$800 million will be disbursed at the closing of the operation, which will initially correspond to around 9.6% of the company, while the remaining US$1.7 billion will be invested over the following three years, until the fund reaches a 25% stake.

In addition to the contribution from the sovereign wealth fund, the new company is expected to seek up to an additional US$2.5 billion through loans and other debt operations. As a result, the partnership could raise up to US$5 billion to finance business expansion.

According to JBS, the resources will be allocated to the construction of new units (greenfield projects, when a factory or operation is built from scratch), the expansion of existing facilities (brownfield) and the acquisition of companies in the protein sector.

In the first two years, the money will be allocated exclusively to projects in Indonesia. After this period, you will be able to finance investments in other Southeast Asian countries, in addition to Australia and New Zealand.

The agreement also provides for an investor protection mechanism. If the joint venture's operating profit - measured by Ebitda, an indicator that measures the company's operating cash generation before interest, taxes, depreciation and amortization - is, on average in 2026 and 2027, below that recorded in 2025, DIM will receive additional shares as compensation. Even so, your stake in the company cannot exceed 30%.

The governance of the joint venture will be the responsibility of a board of directors with up to seven members. JBS will nominate five members, two executives and three non-executives, and DIM will nominate two directors.

Some decisions considered strategic, such as issuing new shares, corporate reorganizations, selling relevant assets or contracting debts above previously defined limits, will also depend on the approval of the sovereign wealth fund.

The investment resources will be used in accordance with an acquisition plan to be prepared by the board of the new company. The document will define the criteria and schedule for investments, and DIM may be obliged to contribute the remainder of the committed resources if opportunities provided for in this plan arise.

The contract also establishes a period of five years in which the two partners will not be able to sell their shares in the joint venture. After this period, the intention is to carry out an initial public offering (IPO) of the company. If this does not occur by the sixth year, the sovereign wealth fund may exchange part or all of its stake for shares in JBS itself, subject to the conditions set out in the agreement.